While you may not hear the term “e-sports” as often as you once did, it’s still a pretty big deal. Sufficiently big that Microsoft (NASDAQ:MSFT) lost fractionally after its Activision arm came under a lawsuit over a perceived monopoly in “Call of Duty” leagues and tournaments.
The suit was brought by a pair of professional gamers: Seth Abner and Hector Rodriguez. Abner and Rodriguez alleged that Activision used “…unlawful monopoly power” to prevent others from getting into the “Call of Duty” tournament market, or establish leagues around such gameplay. The duo also alleged, reports note, that those who do get into the market face inordinately large—some sources called them “extortionate”—financial terms for their involvement. Indeed, the pair note that, prior to 2019, there were several such leagues, including those run by Major League Gaming and even GameStop (NYSE:GME). But after 2019, the Activision Call of Duty League became largely the only game in town.
A Major Suit, and Further Development
The lawsuit, reports note, has the duo seeking $680 million in damages. Activision reps, meanwhile, responded to the suit, declaring it “…meritless litigation…” that the plaintiffs “…demanded that Activision pay them tens of millions of dollars to avoid….” Meanwhile, Activision is making an appearance elsewhere: on Xbox Game Pass. Reports note that Activision Blizzard’s “Diablo 4” title will be the first to appear on the subscription cloud service, which will make it available to play to the 34 million or so Game Pass members without extra charge.
Is Microsoft a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys, one Hold and one Sell assigned in the past three months, as indicated by the graphic below. After a 57.84% rally in its share price over the past year, the average MSFT price target of $469.45 per share implies 16.07% upside potential.
